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Travel Insurance for Trip Disruption

Not sure where you stand with travel insurance if your trip is disrupted?

A change of plans while travelling can be expensive. Just one unwanted disruption can start a chain reaction that ends up costing you the price of accommodation, meals, transport and tickets for missed events and tours. A serious disruption, such as needing to return home for a family emergency, can leave you even more out of pocket or with no choice but to write off the rest of the trip.

The good news is that travel insurance policies have many ways of covering these expenses, and you can find a policy that offers a balance of cost and cover to suit your needs.

  • A travel disruption is an event beyond your control that has impacted your travel plans, or has reasonable cause to impact your travel plans. Travel disruptions include those caused by airport strikes, bad weather or needing to return home if a family member has fallen seriously ill.
  • Interruptions relating to you experiencing a medical emergency are not generally considered travel disruptions, and are not covered by the benefits listed. Additional expenses typically fall under the travel insurance medical cover umbrella.
  • Interruptions relating to a travelling companion experiencing a medical emergency, such as needing to book a room for the night while waiting for them to get out of hospital may be covered by travel insurance.

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This guide explains how insurers cover trip disruptions, and what to look for when comparing policies.

What are travel disruptions and how are they covered?

A travel disruption can be anything that forces you to adjust your travel plans. An airport strike is a trip disruption, as is needing to return home because your partner is sick. Whether any given disruption is covered, and how much you can actually claim, depends on the insurer, the situation and the chosen policy.

The table below gives you a quick breakdown of the types of disruption expenses covered by insurers. Depending on the policy they may be categorised and named differently. For example, one insurer might cover “family emergency” costs under their “additional expense” section while another may have them separate, and one insurer might refer to their additional expenses cover as “emergency expenses” while another might reserve that name for medical-related expenses.

BenefitWhat it covers
Travel delay expensesReasonable costs directly incurred by a travel disruption, such as accommodation, food and alternative transport arrangements
Alternative transport or special events coverThe cost of making alternative travel arrangements to reach a specific event or prepaid arrangement on time, where there has been a travel disruption
Cancellation fees and lost depositsThe cost of non-refundable deposits and prepaid tickets, and cancellation fees, following a travel disruption
Family emergency or cutting trip shortCosts related to the disruption of a journey for a family emergency, or for otherwise needing to end a trip prematurely
Resumption of journeyThe cost of resuming your journey after a travel disruption

When comparing policies, it’s important to make sure you know what is actually covered, and what the available limits are for each benefit type.

  • No minimum benefits: There are no minimum-required benefits here. A travel insurance policy may offer any combination of the above benefits, or none of them at all. In other words, travel insurance policies can mix and match the above benefits and requirements in a number of ways.
  • One event, several claims: You may need to claim a single event under multiple benefits. For example, if you miss the last flight out (through no fault of your own) then you might be able to claim the cost of overnight accommodation and meals until the next flight under “travel delay expenses”, but would only be able to claim the cost of the ticket itself under “cancellation fees and lost deposits”.
  • The reason matters: A travel disruption must be for events beyond your control, but that’s just the start. The specific requirements will vary between cover types and insurers, and are largely dependent on how the insurer chooses to categorise their trip disruption benefits.
  • Travel delay expenses
  • Alternative transport or special events cover
  • Cancellation fees and lost deposits
  • Family emergency
  • Resumption of journey

Travel delay expenses

Travel insurance can pay for reasonable costs related to trip disruptions.

  • Also known as: Accommodation expenses, trip disruption, additional expenses cover and other variations.
  • How it works: If your travel plans are disrupted and you have been stuck somewhere for a certain number of hours (typically about 6 to 12), you may claim the cost of reasonable food and accommodation. This benefit sometimes takes the form of a set allowance, with the first payment made after a certain number of hours, and subsequent payments coming every 24 hours. Other times you may be able to claim expenses later instead.
  • How much is usually paid: Typically $75 to $200 every 24 hours, starting after 6 to 12 hours, to a maximum of $1,000 to $2,000.
  • Limits which may apply: Expect a maximum total limit as well as a maximum daily limit.
  • Payout requirements: Your expenses must be reasonable, not overly expensive or luxurious. Use the limits as guides to how much the insurer expects you to be spending. Sometimes insurers will specify what benefits can and cannot be spent on.
  • Exclusions: You typically cannot claim any travel delay expenses if you are also claiming similar benefits from elsewhere, such as from a work allowance if you’re on a business trip. Often, insurers will also refuse claims resulting from the financial collapse of a travel or accommodation provider.
  • Variations: There may be differences in the amount paid, how long the waiting period is and circumstances in which the policy will or will not pay out.

Travel delay and missed flights

Andrew’s taxi broke down and he missed the last flight out. He is now trying to claim the cost of dinner and a hotel room for the night on his travel insurance. The next flight isn’t for another 20 hours.

  • Policy 1: Andrew contacts the insurer and makes a claim against the “travel delay expenses” section of the policy. He finds out that after waiting for 12 hours he can claim the cost of accommodation and one meal, up to a maximum of $100 per day. He can claim up to a total of $1,000 or for 10 days.
  • Variation: Food and accommodation are covered by most policies, but other expenses like phone calls or travel costs may not be, or might need to be claimed under a different section. The amounts paid out will also vary. Andrew’s policy might also have a general exclusion for missed flights, when not for reasons beyond the traveller’s control, in which case the insurer may reject his claim entirely.

Alternative transport or special events cover

“Alternative transport” cover is often used more specifically to refer to alternative transport arrangements to get to a special event like a wedding or a concert, if it is likely you will miss it due to travel disruption.

  • Also known as: Alternative transport, special events, missed connections.
  • How it works: If you miss a specific sporting event, such as a wedding or a concert you have already bought tickets for, the policy can pay the cost of alternative travel arrangements to help get you there on time.
  • How much is usually paid: Reasonable expenses can be claimed, up to a total limit of typically about $2,000 to $5,000.
  • Limits which may apply: Per-claim limits, per-person limits and cover type limits may apply. Some policies will limit alternative arrangements to public transport while others have no such restrictions.
  • Payout requirements: Policies will only pay if that special event was the entire point of the trip, and other requirements may include that the event cannot be delayed or rescheduled.
  • Exclusions: You cannot claim benefits for the same event more than once. Specific exclusions typically apply to eligible events and transport types, and the cause of your travel delay. You are typically not covered for the financial collapse of a transport provider.
  • Variations: There may be differences in the requirements for cover, the payout limits, the types of alternative transport paid for and other aspects.

Cancellation fees and lost deposits

Travel insurance can reimburse you for prepaid arrangements and the cost of cancellation or rebooking fees.

  • Also known as: Cancellation and amendment fees, cancellation cover.
  • How it works: If you are forced to change your travel plans for reasons beyond your control, travel insurance policies can reimburse you for certain expenses involved and the cost of prepaid arrangements. Cancellation cover will typically extend to prepaid accommodation, tours and similar arrangements. Some policies can also cover travel agent costs, visa fees, frequent flyer points and other expenses.
  • Limits which may apply: Limits apply to the total amount of reimbursement and sub-limits may apply to individual types of reimbursement, such as travel agent fees.
  • Payout requirements: Travel disruption must be an event beyond your control. Only costs specifically mentioned in the policy can be refunded. You are typically only able to claim reimbursement for costs that you are unable to claim elsewhere.
  • Exclusions: Exclusions may apply for medical-related disruptions, including any pre-existing conditions of family members which may require you to cancel or amend your trip.
  • Variations: Rewards (frequent flyer) points are not reimbursable by all policies nor are travel agent expenses, visa costs, prepaid meals or other specific costs. Cancellations for medical-related reasons will be covered by a different section or the policy, or will have specific exclusions apply.

For example

Sam booked her flight with frequent flyer points, had prepaid tour arrangements and accommodation, and had already paid for her flights when the call came in. Her mother had been hospitalised and Sam needed to return home.

  • Policy 1: Sam was only able to claim reimbursements for the cost of prepaid tour arrangements and already-booked and paid for flights and accommodation. No other expenses were able to be claimed. The actual cost of emergency plane tickets back home was covered by the “trip disruption” section of Sam’s travel insurance policy, not the “cancellation fees and lost deposits” section.
  • Variation: The insurer notes that Sam’s mother is experiencing a pre-existing health issue, and that therefore Sam is not able to claim any refunds. Sam assumed that any talk of pre-existing conditions only referred to her own health, and regretted not reading the policy more thoroughly.

Family emergency or trip disruption

If you need to call off a trip and return home to Australia, the costs may be covered by the family emergency section of a policy.

  • Also known as: Medical emergency, cutting trip short, emergency return to Australia, trip disruption.
  • How it works: If you’re forced to return to Australia for a serious reason during your trip, this type of cover can pay for the flights back and the cost of cancelled prepaid arrangements.
  • How much is usually paid: Reasonable expenses are covered in line with the policy terms, including airfares and other expenses. Total limits vary depending on how the insurer has packaged this form of cover.
  • Limits which may apply: In addition to any global limits, sub-limits may apply to each type of cost covered.
  • Payout requirements: Policies will have strict lists of acceptable reasons to return home, such as a family member’s medical emergency. You are typically required to get the insurer’s approval before returning home.
  • Exclusions: You cannot claim benefits for the same situation multiple times. If prepaid costs are also covered by a different section of the same policy you may have to choose which to claim them against. General exclusions may also apply, including pre-existing conditions.
  • Variations: The types of costs reimbursed and acceptable conditions for returning home may vary between policies. This policy can also include travel companions as family members. Terms may vary with single or family travel insurance policies.

Resumption of journey

As the name suggests, this type of cover can help you resume your trip if it was interrupted. More specifically, if you need to return to Australia mid-way through your trip, it can pay the cost of plane tickets and other expenses needed to get you back on track.

  • How it works: If you are forced to return home mid-way through a trip, for appropriate reasons beyond your control, then this feature can pay the cost of airfares and other travel to get you back to where you should be.
  • How much is usually paid: Reasonable costs in line with the policy terms, typically up to a limit of $2,000 to $5,000 for airfares.
  • Limits which may apply: Sub-limits may apply. Limits may also apply to the total claimable cost of “disruption” type cover.
  • Payout requirements: The disruption must be for reasons beyond your control. There typically must be enough time left on your travel cover policy, and it must be all around reasonable and feasible for you to resume your trip.
  • Exclusions: Pre-existing medical conditions of family members are excluded in that you cannot claim trip resumption costs if you had to return home because they were hospitalised due to a pre-existing condition.
  • Variations: The conditions that allow you to return to Australia and later resume your trip may vary. Travel companions and business partners can also be considered family members by some policies. This type of cover will sometimes be bundled with cancellation but is more typically a separate option.

Resumption of journey

Nico was on holiday overseas when he got word that his business partner back home had been in a serious car crash. He immediately contacted his insurer for approval, then cancelled all his plans and booked the first flight back home. After getting everything in order and making sure his partner would be ok, Nico flew back out for the last two weeks of his vacation.

  • Policy 1: The insurer pays for the flights back with the “family emergency” section of the policy, and the cancellation costs with the “cancellation fees and lost deposits” section. When he’s ready to return to his vacation, the “resumption of journey” section covers Nico’s plane tickets back out.
  • Variation: Nico chose a policy without cover for trip resumption and had to decide whether it was worth flying back out for the rest of the holiday at his own expense. Alternately, he might have chosen a policy without cover for “cancellation fees and lost deposits” or “family emergencies”, or one that doesn’t consider business partners to be family for the purposes of trip disruption cover.

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Andrew Munro

Andrew writes for finder.com.au, comparing products, writing guides, sniffing out deals and looking for new ways to help people get the most out of their money.

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